The Senate has rejected the Rudd government’s Carbon Pollution Reduction Scheme today. By all accounts it will be be reintroduced and then passed with amendments. The problem with the scheme is that it is a magic pudding. A government inspired price hike will lead to less carbon consumption, greater innovation, compensation for polluters and low-income households, and all this will be paid for with a 'tiny' reduction in economic growth over the next century. In the process a whole bunch of ‘green jobs’ will be generated. When described in these terms it is hard understand what the fuss is all about.

Afterall, the Australian economy has survived a generation of economic reform that threatened to destroy jobs; yet wholesale job destruction has not happened and Australians have enjoyed a long period of economic growth and prosperity. But there is a fundamental difference between previous economic reforms pursued by the Hawke, Keating and Howard governments and the current reforms. Previous Australian governments had proposed to make the economy more efficient. This government proposes policies that will make the economy less efficient.